Trades Union Congress
Q1. Mr. Tebbit
asked the Prime Minister when he expects next to meet the Trades Union Congress.
The Prime Minister (Mr. James Callaghan)
I met representatives of the TUC at a meeting of the National Economic Development Council yesterday and further meetings will be arranged as necessary.
Mr. Tebbit
Is the Prime Minister aware that in his dealings with the TUC, if he stands by his brave words of last night that present pay offers in the public sector disputes are pretty well the limit, he will have the support of all Opposition Members, even if he cannot command the support of members of his own party? Will he further remind the TUC, on the subject of reform of the law on picketing and the closed shop, that opinion polls show that it is my right hon. Friend the Leader of the Opposition, and not the TUC, who speaks for the trade unionists in this country?
The Prime Minister
I am very glad to have from the hon. Gentleman the official statement of the Opposition's position on pay claims. I am sure that he has been to the fountainhead in order to derive the authoritative exposition that he gave us.
As for the TUC and the question of picketing and the other very controversial matters, discussions are going on now. I hope that they will succeed and will result in a better code than we have at present.
Mr. Faulds
When my right hon. Friend next meets the TUC, will he con[column 550]vey to it that, since the motivation of the Labour movement is concern for the less fortunate in our society, and since Conservatism is a belief in grabbing for oneself, is it not perhaps time that some of the more powerful and self-concerned unions, with their belief in free collective bargaining, became affiliated to the Tory Party?
The Prime Minister
I am constantly reminded by the Opposition that there are a large number of Tory trade unionists, some of whom are at the moment on strike or leading the strikes.
My hon. Friend was absolutely correct as to the concern that is expressed about the origins of the trade union movement. The movement was born out of a desire that there should be justice for those who singly or individually were not able to command justice for themselves. That should be true now in the trade union movement, not only for its own members but also in its concern for all the community.
Mrs. Thatcher
Will James Callaghanthe Prime Minister discuss with the trade union movement today's rise in interest rates? Is he not aware that an increase in interest rates to 14 per cent. is a potential disaster for home buyers? Is it not the case that mortgage rates are already higher than at any time before 1974 and that it is the home buyer and the small business who are having to pay the price for the Government's economic failure?
The Prime Minister
I am grateful to the right hon. Lady for spelling out some of the consequences of the policy she has been advocating. Perhaps she will now give me greater support in the Government's determination to keep inflation down and to achieve moderate wage settlements as a means of so doing. and to ensure that the degree of uncertainty about the level of wage settlements, which is partly responsible for the increase in the minimum lending rate, is put at an end. I would be very happy to have her support on those matters.
Mrs. Thatcher
Is the Prime Minister aware that if he wishes genuinely to get down inflation, he must get down Government borrowing? The real reason for the increase to 14 per cent. is the high [column 551]amount of borrowing which Denis Healeythis Chancellor has been doing and his declared intention to increase that borrowing by a further 2½ per cent. next year.
The Prime Minister
The right hon. Lady is, as so often, partly right. The level of Government borrowing clearly influences the level of interest rates. The level of Government borrowing in this country is about on a par with that of a number of other major industrial countries as a proportion of our gross domestic product. It would be helpful if we could reduce it, but I prefer that it should be done not by cutting public expenditure but by increasing economic growth, which would give us additional revenue.
Mrs. Thatcher
If the Prime Minister is so anxious to reduce Government borrowing, will he withdraw the present White Paper on public expenditure?
The Prime Minister
The present White Paper, which provided for a modest increase of 2 per cent., was generally regarded as a sensible approach to these matters. The right hon. Lady has no need to adopt a hectoring tone about this. But the uncertainties of the present pay situation, including the high additional cost that would result from meeting some of the claims being put forward in the public sector and in the public services—whether in the local authorities or the Civil Service—or some of the other claims, would mean, if carried through, that we would have to review total Government expenditure and the borrowing requirement. There can be no escape from that.
Mr. David Steel
When the Prime Minister and his colleagues meet the TUC in these discussions, are they equipped with up-to-date figures on the present level of wage settlements? Can he give the House any figure for the level over the last month or so?
The Prime Minister
Yes. We are equipped with the notifications which are made. I believe they are not complete. I have not charged my memory, and I hope that the hon. Gentleman will not hold me too closely to what I say. But my recollection is that up to about a month ago, they were running at a little under 10 per cent. One or two of the most recent large settlements, including [column 552]the lorry drivers' settlement, which the House will remember was 22 per cent., are now nudging the level above 10 per cent. This is the Government's concern. We should avoid getting on to this escalator which, four or five years ago, carried us up to 30 per cent. by the end of the round. Therefore, the Government must, and intend to, stand firm in their own area. If the country has to suffer a certain amount of disruption, I shall regret it. But that disruption will be less significant in the long run than it would be if we gave way to all these claims.
Confederation of British Industry
Q2. Mr. Whitney
asked the Prime Minister when he plans next to meet the Confederation of British Industry.
The Prime Minister
I met representatives of the CBI at a meeting of the National Economic Development Council yesterday and further meetings will be arranged as necessary.
Mr. Whitney
At the next meeting, will the Prime Minister invite the CBI to explain to him the grave damage to British industry and to those of us who depend on it and work in it which will be caused by the latest massive rise in interest rates, due to the incompetence of his Government?
The Prime Minister
The last part of the question will be a matter of judgment and argument. As to the first part, there is no doubt that high interest rates, if sustained for a considerable period, are damaging to industry and especially to small firms. That is one reason why it is important that we should maintain our insistence on keeping inflation under control. That, in its turn, will ensure higher employment. If we allow all these things to get out of control, there is no doubt that unemployment will increase.
Mr. Cryer
Will my right hon. Friend explain to the CBI, when it seeks legislation to control the unions, that the experience of the Opposition when in Government was to succeed in losing 23 million days in 1972? That must be an all-time record. Will he accept and also inform the CBI that its opposition to industrial democracy and to planning agreements helps to produce the industrial [column 553]situation that we face today? Does he also accept that the basic solution to industrial problems is to provide decent basic wages and working conditions?
The Prime Minister
The answer to the last part of the question must be “Yes” . As regards the first part, we had some discussion at NEDC yesterday about what is called in shorthand “industrial democracy” . There is a difference between the Government and the CBI on the methods that should be employed. I am bound to tell the House that the CBI representatives said officially that they believe it is important that all CBI members should make available as much knowledge as possible of firms' investment programmes, profitability and future programme. There were complaints that a number of companies were not doing that. The CBI said that, if it could use its influence to ensure that companies did co-operate, it would do so. But there is still this difference over the method by which the Government would hope to proceed on industrial democracy.
Mr. Lawrence
Can the Prime Minister tell the House which Conservative trade unions are currently on strike or taking industrial action?
The Prime Minister
No, Sir.
Prime Minister
(Engagements)
Q3. Mr. Parry
asked the Prime Minister if he will list his public engagements for 8 February.
The Prime Minister
This morning I presided at a meeting of the Cabinet. In addition to my duties in this House I shall be holding further meetings with ministerial colleagues and others. I will also be meeting my hon. Friend and other of my hon. Friends representing Merseyside constituencies.
Mr. Parry
Will my right hon. Friend reflect this afternoon on the “World in Action” programme shown on Monday which linked mortality with unemployment? A reference to Liverpool suggests a possible 1,000 premature deaths. Will the Prime Minister order a Government inquiry into this latest disease? Does he not agree that large private companies such as Dunlop and Plessey have announced substantial redundancies in [column 554]Liverpool and could possibly be considered in the future to be parties to murder?
The Prime Minister
There is undoubtedly a connection—I am obliged to my hon. Friend for drawing this to my attention—between poor urban conditions and a higher rate of mortality just as there is a distinct relationship between earlier deaths among manual workers compared with deaths among non-manual workers. These are factors that must always be taken into account. I note what my hon. Friend says about closures. Let us also remember—because Merseyside gets such a bad reputation—that Schreiber's is making a substantial improvement and hoping to employ several hundred more men. So is GEC Fairchild. There are, therefore, elements on the positive side as well as negative ones.
Mr. Baker
Does the Prime Minister appreciate that if there is a choice between a policy of high money interest rates and reducing Government expenditure, for the Government always to choose to increase money interest rates means that they are sacrificing future growth prospects of the economy? Is it not evident that the Government are embarked on a policy of low growth with the inevitable consequence of low wages?
The Prime Minister
This is a matter of dispute among economists. I do not think that we will clear it up by means of a supplementary question and answer. It would not be right to say that the Government have allowed public expenditure to go ahead untrammelled. Indeed, the complaints of my hon. Friends below the Gangway are that we have restricted it to too great a degree. In terms of the needs to be met, they are right, but the Government, the Chancellor and I always have to consider how we balance those needs. It would be very shortsighted to suggest that we should cut back substantially on public expenditure in a number of areas where needs are so great. Hon. Members should consider what we are hearing now about the National Health Service and other services. It would be very short-sighted to cut back further there, though, as I said earlier, it may be necessary to do something in those areas.
Mr. Ashley
Will the Prime Minister find time to reflect that our low-paid [column 555]workers require something similar to the Roosevelt New Deal to give them a guarantee that the benefits that they achieve will not be eroded within the next few months? Does he agree that the guarantors of such a new deal cannot be the Government, but must be the better-paid and more powerful groups in our society and that, until those groups pursue productivity and stop leapfrogging, we shall all continue to suffer—low-paid workers and society in general?
The Prime Minister
I am obliged to my hon. Friend for his comments. He has raised one of the most difficult issues which has to be resolved. Clearly, if everyone gets the same increase as the low-paid workers or, as I have heard some claim, twice as much as the low-paid workers, the man on low pay will either remain in the same relative position or fall further behind. The problem has to be resolved. The Government have made an approach and an offer to low-paid workers.
Mr. Skinner
It is not good enough.
The Prime Minister
The hon. Gentleman is not negotiating. He had better leave that to the negotiators. We have proposed for low-paid workers a fixed sum and a study of comparable pay for [column 556]comparable effort in order to see whether low-paid workers in the public sector get less than low-paid workers in the private sector. That is a matter of much dispute and only an examination will reveal the truth.
Sir Geoffrey Howe
Does not the Prime Minister remember that 12 months ago, the minimum lending rate stood at 6½ per cent? Today it stands at 14 per cent. Does he not accept that that increase in interest rates, which is doing such damage to home buyers and industrial confidence, is the direct result of his Government's plan to increase public spending this year by £4,000 million—more than 6 per cent? Is it not clear that continued increases in interest rates without reductions in public spending are quite inadequate to redress the balance in the economy?
The Prime Minister
I do not accept a great deal of what the right hon. and learned Gentleman says. A combination of internal and external policies has resulted in MLR going to a far higher level than any of us ought to want or desire. Another element that the House must take into account is that it is important to maintain the stability of our currency. The increase in interest rates is, partly, a protection for that purpose. That will help to keep down inflation.